California Group Health Plans
Group health plan competition in California overview
California has a very competitive market for small group health insurance. According to a 2025 report, around 2.3 million people were enrolled in small group health insurance plans in California 1. As shown in the chart below, six health insurance companies accounted for ninety-three percent of the enrollment in health insurance plans for small employers (1-100 employees) in California.
| Health Insurance Company | Percent of Small Group Enrollment |
|---|---|
| Kaiser Permanente | 35% |
| Blue Shield of California | 21% |
| Anthem Blue Cross | 24% |
| Health Net | 5% |
| Aetna | 2% |
| United HealthCare | 7% |
| Other | 7% |
Unique health insurance plans and provider networks
Each of these companies have different California group health plan benefits and provider networks. They compete on price for small group business. We, Benefits Cafe, help employers select the benefits, providers and monthly premium that best meets the needs of your business. Give us a call and we can help you (800) 746-0045.
Small-group health insurance companies
Kaiser Permanente
Kaiser Permanente is a “staff model: HMO, which means that the insurance company includes hospitals, doctors, nurses and insurance personnel. Kaiser is a “closed” system so that you receive all your treatment from a Kaiser doctor or hospital – except in an emergency. As a closed system, Kaiser contains costs better than other California group health plans. Doctors are paid salaries for their services as opposed to traditional arrangements where doctors and hospitals are paid for every test and procedure they perform. The Kaiser system offers high-quality comprehensive benefits at a low cost relative to other companies. You give up the freedom to see non-Kaiser doctors for the Kaiser benefits and low monthly premiums. Kaiser offers many co-payment HMO plans; deductible HMOs; and HSA-compatible plans.
Kaiser also offers PPO plans where a member does not have access to Kaiser – this is intended for business owners or key employees whose company offers Kaiser but who want to use non-Kaiser doctors and hospitals. The Kaiser PPO plans are typically not competitive price-wise, but there are ways to put Kaiser alongside another insurance company with lower-priced PPO plans
California small group employers can purchase Kaiser plans three different ways: through CalChoice; through Covered California for Small Business (SHOP); or directly from Kaiser. The benefits and rates are identical regardless of which way an employer purchases coverage.
Kaiser has long had the largest membership of California small businesses. Kaiser’s California membership is the largest by far with 8.6 million members2.
Blue Shield of California
Blue Shield of California is a not-for-profit health insurance company with coverage in California and also covers out-of-state employees of employer-sponsored plans with the Blue Cross Blue Shield Blue Card system. Blue Shield insures 2.4 million Californians of which about 419,000 were in the small group market in 2015 at which time only included employers with only 2-50 employees (small group expanded to 1-100 employees in 2016). (5)
The Blue Shield of California provider networks are very large and include most California doctors and hospitals. Blue Shield offers their full “Access Plus” HMO plans which enable members to go directly to certain specialists within designated medical groups. The “Local Access” HMO plans have fewer doctors and hospitals and are less expensive options. Blue Shield recently introduced their “Trio ACO” (Accountable Care Organization) HMO plans which have very few hospitals but enable revenue sharing among the hospitals and medical groups. Small businesses can only offer the Blue Shield full network or the small network HMO plans, not both. BSCA does allow small employers to offer the full network HMO and the Trio HMO networks. Blue Shield offers full network Silver and Bronze level HSA plans and Platinum, Gold, Silver and Bronze level PPO plans. Blue Shield also offers competitive group dental, vision and life insurance plans.
Anthem Blue Cross
Anthem Blue Cross is the California subsidiary of Anthem, Inc., the second largest health insurance company in the United States, insuring 40 million (or 1 in 8 Americans) in 14 different states.(3) As of 2015, Anthem Blue Cross insured about 371,000 Californians in the small group market. They offer HMO, PPO and HSA plans to small businesses with deductibles ranging from $0/yr. to $6,000/yr. One of the Anthem Blue Cross’ strengths is the large number of doctors and hospitals who participate in their PPO and HMO networks. Anthem also offers progressively smaller (and less expensive) a “Select” network of doctors and hospitals.
Health Net
Health Net is a regional insurance company that provides health insurance to about 6.1 million people. In 2016 California Regulators approved the merger of Health Net with Centene, a fortune 500 company that specializes in Medicaid and Medicare. Approximately 2.8 million of Health Net’s members are in the Tricare program for military personnel. In 2015 Health Net insured 244,000 people in the California small group market.(4)
To adapt to the requirements of the Affordable Care Act (ACA), Health Net of California dramatically reduced the number of health plans they offer. For example, in 2016 Health Net offers only one PPO plan in the Platinum, Gold, Silver and Bronze metal tiers. They offer no Silver or Bronze level HMO plans. A California small group employer (1-100 employees) can offer Health Net’s full network HMO plans OR, their narrow network plans – but not both full and narrow network HMO plans. Health Net offers 5 HMO networks including the Full network, Whole Care, Smart Care, Community Care (available only in Los Angeles and Orange counties) and “Salud Health Net Y Mas” HMO plans – for employees and dependents who prefer Spanish Speaking providers in Southern California and Northern Mexico (only in certain areas.) Health Net also offers a single HSA compatible health plan (Bronze level); a single EPO plan (Silver level); and 4 narrow network HMO-like Pure Care HSP plans in Platinum, Gold, Silver and Bronze metal tiers.
Aetna
Aetna of California offers PPO plans using their “Managed Care” (MC) network – which Aetna defines legally as a “POS” or Point of Service Plan. Aetna does offer a “PPO” network which has more providers than the MC network; and, one very expensive indemnity plan where members can access any provider (this is normally used for out of state employees or those living in remote areas that are not near in-network providers). Aetna also offers Health Savings Account (HSA) compatible plans.
United Health Care
UnitedHealth Care is the largest health insurance company in the United States with 30 million commercial members nation-wide and about 85,000 small group members in California. With $201 Billion in annual revenue (that’s Billion with a “B”), UHC ranked as the 6th largest corporation in the United States in 2017!(6) UnitedHealth Care offers coverage in all 50 states and is able to cover small groups that may not ordinarily qualify with another California insurance company.
UHC offers PPO, HMO and HSA plans and unlike most other insurance company, UHC allows small employers to offer full and narrow provider networks at the same time. The UnitedHealth Care full network HMO plans are called “Signature” plans while the narrow UnitedHealthcare narrow network HMO plans include “Advantage,” “Focus” and “Alliance” plans which have smaller networks of doctors and hospitals. The “Select Plus” PPO plans are the full network plans while the “Core” network PPO plans have fewer doctors and hospitals.
Other Health Plans
Cigna
CIGNA is the largest “other” health insurance carrier in California. CIGNA does not offer California individual and small group health plans. CIGNA can be competitive in the mid-size to large group markets in California and sometimes is a good fit for large companies that have employees in many states.
California Choice (CalChoice)
California Choice (also referred to as CalChoice) is not another health insurance company but it is an option for small employers in California. CalChoice allows small businesses to offer Health Net, Anthem Blue Cross, Aetna and Kaiser Permanente plans at the same time. (CalChoice also includes regional HMO plans, e.g., Sutter Health Plus in Norther California, Western Health Advantage in the Sacramento area and Sharp Health Plans in the San Diego area.) For example, a small business may have some employees who love Kaiser while others hate Kaiser (people seem to feel passionately one way or the other about Kaiser.) All of the insurance companies require about 75% of the eligible employees be enrolled with that single insurance company, which make offering Kaiser difficult if more than 25% of the employees want Kaiser. That’s where CalChoice can help.
An employer can have half of the employees on Kaiser and the other half on Health Net or Anthem Blue Cross. Pre-ACA (before 2014) CalChoice plans were more expensive than when purchased directly through either Kaiser, Health Net or Anthem Blue Cross. That changed January 1, 2014. Now, CalChoice offers its plans at the exact same rate as plans that Kaiser offers directly. Aetna, Health Net and Anthem Blue Cross plans are comparably priced to plans these insurance companies offer directly. The benefit of CalChoice is that you can offer your employees four different insurance companies at the same time. The employer receives one monthly invoice.
CalChoice markets itself as a “health insurance exchange” as this has become a popular buss word with the Patient Protection and Affordable Care Act (PPACA). Unlike an exchange, however, prices don’t fluctuate based on demand. Rather rates and benefits are fixed and filed with the State of California. CalChoice does allow a greater selection of insurance companies, with limitations. One limitation is that a small employer can only offer the plans from one or “two adjacent” metal tiers. This means an employer can offer only Silver or only Gold Level plans, or Silver and Gold tier plans. But not Platinum and Silver or Bronze and Gold. Another limitation is that each of the insurance offers different provider networks with specific plans, for example a Bronze Aetna plan may use the Basic or Deductible or “AVN” network. It’s a bit confusing. Also, the only PPO plans available in CalChoice are through Anthem Blue Cross and some of these use the “Select” or narrow PPO network. So, you’ve got to look closely at the plans. Contact BenefitsCafe.com and we can help you set this up for your employees (800)746-0045.
1The California Healthcare Foundation, “California Health Insurers, Enrollment Almanac – 2025 Edition” is an excellent source of information on the market for health insurance in the state. February 24, 2025
2 Kaiser Permanente, “Our History” and “Fast Facts”
5 Blue Shield of California Company Facts 2016
